Paying £2880 into pension when retired

Dazed_and_C0nfused

harz99 said:

Joining in to ask a related question - have the £2880/3600 limits been increased or altered after this week's 2023 budget please?

No, exactly the same as before the budget.

dealyboy

Hi @harz99 ...

harz99 said:

Joining in to ask a related question - have the £2880/3600 limits been increased or altered after this week's 2023 budget please?

... but in case you didn't know the LTA has ... hip hip hooray? ... no not really, tighten your belt one more notch.

tg99

harz99 said:

Joining in to ask a related question - have the £2880/3600 limits been increased or altered after this week's 2023 budget please?

I had a look into that too but can’t see any change to that limit. Wasn’t expecting it to have risen though given what the pension budget reforms were supposedly aimed at.

dunstonh

tg99 said:

harz99 said:

Joining in to ask a related question - have the £2880/3600 limits been increased or altered after this week's 2023 budget please?

I had a look into that too but can’t see any change to that limit. Wasn’t expecting it to have risen though given what the pension budget reforms were supposedly aimed at.

The £3600 non earners limit is also considered to be open to abuse. The limit hasnt changed since it was introduced in 2001 and it was always said that it would be removed if abused.     It has been abused but the erosion in real terms value over 22 years means its not really a massive cost.   (abuse means not as intended and used by people who it was not targeted at).

tg99

dunstonh said:

tg99 said:

harz99 said:

Joining in to ask a related question - have the £2880/3600 limits been increased or altered after this week's 2023 budget please?

I had a look into that too but can’t see any change to that limit. Wasn’t expecting it to have risen though given what the pension budget reforms were supposedly aimed at.

The £3600 non earners limit is also considered to be open to abuse. The limit hasnt changed since it was introduced in 2001 and it was always said that it would be removed if abused.     It has been abused but the erosion in real terms value over 22 years means its not really a massive cost.   (abuse means not as intended and used by people who it was not targeted at).

How much could non earners contribute pre 2001?

fifeken

When I read this:

"The maximum annual tax-free amount you can save into a pension once you've taken money out of it will rise from £4,000 to £10,000 from 6 April."

I immediately thought it increased the £3,600 figure discussed here. Reading the above replies I suspect now that you need to still be earning at least £10,000 to do this. Is that correct?

molerat

fifeken said:

When I read this:

"The maximum annual tax-free amount you can save into a pension once you've taken money out of it will rise from £4,000 to £10,000 from 6 April."

I immediately thought it increased the £3,600 figure discussed here. Reading the above replies I suspect now that you need to still be earning at least £10,000 to do this. Is that correct?

Yes .....................

fifeken

molerat said:

fifeken said:

When I read this:

"The maximum annual tax-free amount you can save into a pension once you've taken money out of it will rise from £4,000 to £10,000 from 6 April."

I immediately thought it increased the £3,600 figure discussed here. Reading the above replies I suspect now that you need to still be earning at least £10,000 to do this. Is that correct?

Yes .....................

Thanks.

Just caught up with some other threads telling me the same.  At least I wasn't the only one!

sevenhills

fifeken said:

When I read this:

"The maximum annual tax-free amount you can save into a pension once you've taken money out of it will rise from £4,000 to £10,000 from 6 April."

I immediately thought it increased the £3,600 figure discussed here. Reading the above replies I suspect now that you need to still be earning at least £10,000 to do this. Is that correct?

It could help me, as I used a pension as a deposit for a house purchase when I was 56. You would need to be rich to contribute £10k to a pension, I may be able to do it in my last year of work.

tg99

Retired, 72 yrs old, 2016 fixed protection £1.25m with benefits crystallising events of £1.235m (all of which has had 25% cash taken as tax free lump sum) thus leaving c£15k headroom for the age 75 test for any drawdown portfolio increase (should fall just within this thus avoiding any LTA charge on any of the pension assets).

No £2,880 annual contributions have been made given the fixed protection taken but we are now looking into this given the scrapping of the LTA. My conclusion is:

- not an option for 22/23 since LTA still in place along with the LTA charge hence don’t want to make a contribution and lose protection 

- for 23/24, no LTA charge but the tax free amount is capped at £268,275. Assuming the £1.25m protection also protects 25% of this as a tax free lump sum (£312,500) then making any further contributions even in 23/24 would void the fixed protection and thus lose the higher level of protected tax free cash. Hence no sense in making any £2,880 contributions esp as added factor of Labour saying will reintroduce the LTA and then the uncertainty over how that would be applied to ppl who have lost their fixed protection.

The above just my initial thoughts without having seen all the finer detail (think some aspects still tbc when I checked last week) but just wondering if the above conclusions sound correct or if I’m missing anything that would mean the £2,880 contributions are viable. Thks.